Nicola Bakalov Director of Card Payments First Investment Bank

Nicola Bakalov graduated the University of National and World Economy and holds a Master's degree in International Economic Relations. After his graduation he began working in the Representative Office of Chrysler and Jeep as a trader. Three years later, at the end of 2000, he started working at First Investment Bank as a Specialist Card Payments, since January 2005 he is Head of Bank Cards Issuance and Management Department, and since 2006 he takes the position of Director Directorate. He is a member of the executive committees of Visa Bulgaria and MasterCard Bulgaria.  

How do Bulgarians prefer to pay - with a card or cash?

Definitely with a card - this is obvious from the fact that only for the last three years the payments with cards issued by First Investment Bank have doubled. We can see a similar trend across the country. Although still cash payments are more, their share gradually decreases.

Do the interest towards credit cards increase in Bulgaria?

Yes, definitely is increasing. And this is quite natural - the card is far smarter, more modern, more comfortable, and now in some cases much faster method of payment. Moreover, particularly when concerning credit cards, the payment represents only a part of the benefits of the entire service. Plus the grace period, the opportunity to buy something today, even if one receives salary or other income tomorrow, the discounts provided by the banks for payment by credit card, the modern loyalty programs, it is really hard these days for one to continue to prefer withdrawing money and filling his pockets with cash.

Recently, banks tend to issue more credit cards at the account of household loans. What is the reason for this trend?

As I mentioned, the credit card combines loan with payment function - in fact it gives the whole solution. The product comprises far more benefits and advantages when paying our daily expenses for food and entertainment, and also for larger purchases. Of course, consumer loans also have their advantages that make them more attractive in certain cases - for example when we want to make a major purchase, while we can not pay by a credit card due to lack of POS terminal or for large expense as repair of home, wedding or other case where the funds will be recovered for years. In such cases it is wiser to take a household loan. However, such cases are becoming rarer with the huge introduction of POS terminals in all areas of trade and services.

Many people used credit cards mainly to withdraw cash which is quite expensive. Have the Bulgarians already learned how to use their credit cards in order to get the maximum benefit from them?

Certainly there is significant difference - for example, while we recognize doubling increase of credit card payments for the last three years, we record a decrease of nearly 40% of ATM withdrawals - people just got accustomed to pay at POS terminals and of course now they do not have to go often to the ATMs.

Did the crisis change the conditions to be met by the applicants for credit cards? What is the limit that you grant most often?

No, we have not changed the criteria. They have always been the minimum required to enable the bank to guarantee to the bank itself and to our customers regular and duly service of obligations under the credit card at the maximum level possible. This is the basis of a long-term partnership and our customers appreciate it.

The limit on the card is based on individual assessment of the creditworthiness of the customer and the customer relationship with the bank. Usually it amounts to several salaries but in many cases we grant much higher limits. Another convenience for the customers is that credit cards are issued under simplified procedure – the customers are not required to present any documents and they can apply without coming to the office of the bank - they can apply through the Internet or by calling at the contact center phone number, and then they can receive their card at their chosen bank office.

Often frauds can occur connected with card payments when shopping online. What should we do to avoid becoming a victim?

Fibank, following the best international practices, carries out continuous monitoring of suspicious transactions. Besides, the Bank has developed and implemented clear rules for consumer protection in such situations. To be effective these efforts, however, cardholders also need to observe certain safety requirements. There are various mechanisms by which fraudsters may attempt to steal the card data. For example, the so-called "phishing" in which customers receive fake emails requiring on behalf of the bank or any card organization additional registration of the card. Customers are redirected to fake websites and are asked to enter their card number, personal data and even their PIN code. Cardholders should be aware that the bank never would require such data from them and they should not provide it under any circumstances.

Before making payments with Internet merchants the customers need to become familiar with their reputation and security policy and to ensure that there is no misleading text in small letters, according to which after the expiry of a certain period the cardholder will be automatically subscribed to certain service. When ordering on the network is necessary to check the sale and delivery conditions, warranty terms, etc. We recommend to everyone the service of First Investment Bank "SMS notification" by which the cardholders can receive a notification by SMS of each authorization made with their card, regardless of whether it was done in a "real" store or online. When the cardholders and the bank combine their efforts, the risks in Internet payments are minimal. On the other hand, online trading offers significant advantages - for example if you have a problem with the delivery of a certain good or if you fail to receive a service within the prescribed term, the bank issued the card will contest the payment and will reimburse the amount paid. For example, a year ago in a situation with a foreign airline company, Fibank reimbursed the full amount of failed flights to all of its cardholders. On the other hand, people who paid by bank transfer had no mechanism to contest payments and failed to recover their money back.

What is the interest towards PayPass cards for contactless payments of Fibank?

Huge. Thanks to the collaboration with MasterCard we put Bulgaria on the "PayPass map" of Europe where countries such as Belgium, Holland, Austria, Portugal, Croatia, Czech Republic, etc. are still absent. All leading banks have focused their efforts on contactless payments in one form or another. In Bulgaria there are already over 300 retail outlets that accept contactless payments thanks to First Investment Bank. Tens thousands of cardholders now benefit from contactless payments and each day their number grows.

When in our country we shall be also able to pay in the store by a clock for example?

If just two or three years ago, it was only fiction, today it is reality that each bank can offer according to the needs and desires of its customers payments by a clock, a keychain or something else. First Investment Bank plans to go even further and is preparing a pilot project with M-Tel, which shall enable the bank customers to pay directly with their mobile phone. This project will open many new opportunities to customers and merchants considering the huge opportunities provided by a cell phone compared with the plastic card. We are enthusiastic and we expect strong interest not only from customers but also from merchants for whom the implementation of new technologies is of great importance.